Speaker Paul Ryan Talks Tax Reform at Heritage Foundation CSPAN October 12, 2017 6:28pm-7:01pm EDT
>> we had the opportunity to work with paul when he was at empower america. when he was a back bench republican member. when he was chairman of the house budget committee. and then chairman of the ways and means committee. and now we're horned to continue working closely with him as he serves as speaker of the house of representatives. we value his commitment to the principles that hold the conservative movement together. and we look forward to continuing our close engagement with him, particularly as we work to transform america's tax system in a true kempian manner. it's my great honor and privilege to welcome back to the heritage foundation our good friend, speaker paul ryan. [applause] mr. ryan: look, first of all, to dr. fuelner and all the people here at heritage, thank you for having me. the first thing i want to say
is i want to say how much we, each of us, myself included, owe to this man, ed full in her. -- fuelner. [applause] the conservative movement has never had a happier warrior or a more influential one. i get a kick out of the story that, like i said, i've known ed since my early 20's. he tells this story from 1971 about a meeting he had on capitol hill. i'm sure you probably know where i'm going with this. he heard some things about a freshman congressman who had some big ideas about economics and that of course shocked him. that's how he came to know jack kemp. it was the very first of many meetings and many exchanges between the two of these two great icons of the conservative movement, these great friends. back then that's what you had to do. you had to go door to door to find like-minded conservatives. ed changed all of that.
and he gave us all of this. he helped give us a conservative movement that moves. he inspired a generation to reclaim our founding principles and apply them to the problems of the day. one thing that we know is that ideas alone, they're not enough. if they were, we would have fixed our broken tax code right now. bold reform means taking on not just the status quo itself, but the people who defend it. who stop at nothing to keep the system rigged. in that spirit, i'm here to talk about a big choice that we have to make. a choice that is just so central to the future of our country. as you know, under president trump's leadership, we have released a framework for overhauling our tax code. the tax writers on the ways and means and the senate finance committees are currently filling in all of the details.
but the central tenants of our plan are very clear. our plan will lower tax rates at every income level for families. they will deliver the lowest tax rates in modern history for job traders of all sizes. we will end the death tax, repeal the alternative minimum tax, and eliminate the marriage penalty. and we will dramatically simplify the tax code altogether. clearing out the special interest carve-outs and loopholes. whether he go from having the worst tax code among the industrialized nations to one of the most competitive. and for families, all of this will mean more jobs, fairer axes and bigger paychecks. for our economy it will mean the real growth that has alluded us for too long we'll restore. so tax reform is clearly in our economic interests. it's also in our greater national interests and the reason is this.
imbedded in our d.n.a. is this beautiful notion, the condition of your birth does not determine the outcome of your life. and what affects it, what drives it, it's your own striving, it's your own sense of purpose. if you work hard, you play by the rules, you can rise. if you fall short, you can bounce back. you can make something of yourself and of your dreams. it is this idea that has helped make america so exceptional and americans so resilient. i have to say, though in our time, this promise has dimmed and for many people we've barely moved the needle. so look at our tax system today and you will see a picture of why so many hardworking people feel that they're being left out. as our tax code has grown, so too has its bias against the middle class and the people who are striving to get there. the way things work today, the
wealthy and well connected got their prime choice of carve-outs. they pay accountants good money to use all of those loopholes. who can blame them? if washington's going to be in the business of picking winners and losers, people are going to line up to game the system. over the years both parties have enabled this. tucking in this or that provision with their own narrow set of beneficiaries. so the working mom out there idea ow with some great for a business but no connections, or the family living paycheck to paycheck, trying to pay for college, trying to pauch up the roof on the house or build up a rainien this day fund for the unexpected, the tax code offers you no meaningful relief. it makes you shoulder more and more of the burden. it hurts your ability to save and invest. it drouns new a tax code so hopelessly complex you have to pay somebody to navigate for you. you never really know how much you're going to pay and that's
kind of the point. or, or you just may not be able to afford that. you're going try and figure it out on your own. maybe you overpay. or maybe you make an honest mistake. and then you end up getting a call from the i.r.s. meanwhile, the well connected, they've got the resources and the wherewithal to find just the right loophole or benefit and as we stay locked in this cycle, other countries just keep passing us by. we are losing jobs to countries like china who are taxing their businesses at much, much loser -- lower tax rates. our foreign competitors are more than happy to take the growth in their businesses. this tax code is sapping our aspirational spirit. and it enables our decline. it's just that simple. so this is no time to shy away from taking on the defenders of the status quo. the special interests who prop up this tax code, they seek to extract the most value for
themselves, even if it means keeping the country on the path to decline. but the last year brautbrauth us a lot of new hope. if we choose to do nothing, we allow people struggling to get by to become the permanent normal. we allow stagnation to become our way of life. and you know as well as i do that if we fail to restore real growth and opportunity, that plays directly into the hands of the left. stagnation is the breeding ground for a class-based society where elites in washington seek to micromanage and prederment path of our lives. -- predetermine the path of our lives. they'd rather equalize the outcomes and lower our lives into dependencey. we know how this movie ends. we've seen it many times before. and we cannot let this happen. not here in this country. so right now we've got a chance to get off this downward path. to remove these barriers of upward mobility. to restore the value of work
and ingenuity. so the choice is clear and it is this. are we going to be a country that renews its promise or are we going to accept this kind of decline? are we going leave things better off or just leave? this is not merely about what kind of tax code we're going to have. what our rates are. it's about something much, much more profound. this is about what kind of livelihood people can expect in this country. it's about whether moms or dads can afford to send their kids to college or save for retirement. it's about the dignity that comes with being able to take care of your own. all of us have talked about tax reform for years. for decades in ed's case. [laughter] that moment's here and that moment's now. like any opportunity of a lifetime, it has to be seized. we have to choose to turn this page. we have to choose to do this.
you all know. an army of lobbyists will come to protect the special interest provisions and derail tax frorme. and when that army comes -- tax reform. and when that armsy comes we must be able to count on the foot soldiers of the conservative movement to see this thing through. hardworking families gain nothing if we slip into complacency. they gain nothing if we allow ourselves to be distracted. our workers do not see their paychecks rise one penny if we shrink from this moment. we know what we are for. and we know what needs to be done. and now we have to have the resolve to achieve what we have fought for for so long. rest assured you are going to hear and we are already hearing the same recycled stale criticisms from the naysayers and the defenders of the status quo. these are the folks who believe that we can just tax and spend our way to prosperity. these are the folks who helped rig our tax system to benefit entrenched interests in the first place and our intent on
keeping -- and are intent on keeping it that way. i say, let's have this debate. let's tackle these baseless arguments head-on. bring it on. where better to start than the same tired, old line of attack that this tax cut is a tax cut for the rich at the expense of the middle class. how original. they've been saying this stuff for years. for as long as i can remember. you know what the irony is of all this? a tax system that disproportionately benefits the wealthy instead of the middle class, that's the one we've got right now. it works best for those who know how to take advantage of all the breaks and deductions. under our plan, people in the middle get real relief. we are lowering rates so we can keep more of what we earn. instead of seven brackets spread out, there will just be three. on top of that, we're going nearly double the standard deduction to more -- so more people will pay no taxes on more of their income, so more families will get a break. so in reality this plan is
really the single most important thing we can do to help the middle class. lower tax rates. a larger standard deduction. a bigger child tax credit. and a code that is simpler and fairer for everyone. there tell that you eliminating carve-outs will hurt middle class families rather than the special interests. this one takes the cake. give me a break. most hardworking americans never see a dime from these loopholes. instead these provisions just reward the few and keep rates artificially high for everybody else. they only make it more difficult to get tax relief to those who actually need it the most. so yes, we're going to throw out the special interest loopholes that riddle our tax code. while doing that, we're going to preserve the incentives that people rely on. for home ownership and charitable giving. we're going to simplify benefits for work, retirement and higher education. this is so important. because our tax code does not only complicate your life every spring, it complicates the most important decisions families
actually make. it just adds to the stress. here's an example. families trying to send their kids to college have to cyst through about a dozen different -- sift through about a dozen different tax breaks and 100 pageses of i.r.s. instructions so fee this there are benefits that help them. we're going simplify this to the point where most americans will be able to file their taxes in the form the size of a postcard. one just like this. you know what? for defenders of the current system, this thing, this right here, this is their worst nightmare. because this empowers people to see how much they are paying and why. this increases transparency. and we know how terrifying a proposition that is for the i.r.s. and the defenders of the status quo. finally, and this may be one of the most offbase charges you're going to hear. they will tell you that cutting the corporate rate only helps the fat cats.
here is what a candidate for president in 2012 said. quote, our current corporate tax system is outdated, unfair and inefficient. it provides tax breaks for moving jobs and profits overseas and it hits companies that choose to stay in america with one of the highest tax rates in the world, end quote. you want to guess which candidate that was in 2012? it wasn't mitt romney. that was barack obama. now it is true that because of all these loopholes and deductions, many corporations don't actually pay the 35% statutory rate. that prove mice point. if we get rid of these special carve-outs and cut the rate, corporations will pay what they're supposed to pay. that is what we mean when we say the system will be fairer for everyone. but beyond that, fixing the business side of our tax code, it's really about helping families. it's really about helping workers. cutting the corporate tax rate means more jobs right here in
the united states. it will foster increased competition. which will directly drive up wages for our workers. you know what higher wages means? higher wages means bigger paychecks. bigger pay checks and lower tax rates means more money in your pocket. and more money in your pocket means a better, higher standard of living. over the past several months i've been traveling the country visiting with companies both large and small. i've toured factory floors. i've talked with incredible people making things right here in the united states. the people who are developingy cutlering edge technology and who are reviving american manufacturing. it's really impressive to see. and it's in spite of ferocious international competition. and wherever i've gone, i hear the same exact thing. our tax code is crushing growth. we have less to invest in equipment and research and development. we have less to invest in jobs and we have less to invest in wages. the defenders of the status quo are content with having a tax
system that drives good paying jobs overseas and traps trillions of dollars in profits abroad. we are not content with that. we don't want to just level the playing field for our businesses and our workers. we want to give them a clear advantage over foreign competition. and a territorial system like the one that we will propose, that will allow us to bring profits back home so they can be reinvested into our economy and our work force. in fact, the national association of mfs they just did -- manufacturer, they just did a survey last week and they found that if enacted, according to their survey and members, a majority of manufacturers in america will raise their wages and hire more workers. that's what you get when you get tax reform. higher wages, more jobs, higher standard of living. and if we are really, truly serious about creating more jobs, we need to help our out small businesses in a big way. that's where most of the jobs come from. that's why we're proposing a new lower tax rate structure for all small businesses. this is the kind of bold reform
that will revive main streets across the country. something that we so desperately need. look, working together. house, senate, the president. whether he see this thing through. because this is a choice at hand. more decline and stagnation, or the renewal of the american idea. protect powerful interests or empower the people who work hard and play by the rules. in the end it will not be me who decides what we do. by now i think you get the sense of where i stand on tax reform. no. it will be this movement which decides which direction we take. it will be all of us in the conservative movement which decides which direction we go. and if we pull together, if we reject the usual tired cynicism, we will get this done. whether he do something so historic that it really materially improves people's lives and puts this country on the right track. if we do not, if we let up and
lose our nerve, if we squander this opportunity, it's not going to come back. i am under no illusions about how difficult this is going to be. it hasn't been done since 1986. but we cannot rest. i will not rest until this work is done. thank you very much. [applause] r. fuelner: that was terrific. i guess i committed a big blooper the other day because i said tax cuts, seven to three, increase the exemption, repatriation and cut the business rate down to 20%. but you talk about reform. mr. ryan: it's both. you have to reform the code itself so that the game is not rigged. so that people get to keep more of what they earn and that also is a tax cut.
it's really two things. it's cutting taxes, cutting tax rates, letting families keep more what have they earn. but reforming the system so that the system is pro-growth and less cronyism, more opportunity. mr. fuelner: as you travel around and meet with small -- esses, etc., do they does the mom and pop bakery in janesville understand the importance of, like, repatriation, expensing instead of deducting? mr. ryan: oh, for sure. small businesses completely understand expensing quite a bit. if they can expense a truck or a piece of equipment, if it's a small manufacturer, you know, with 25 employees, which is really common where i come from, they've got machines which are really costly, they know what expensing means because they'll tell you exactly what piece of equipment and how long it takes them to write it off. you work through a factory in wrks with 10,000 square feet, they'll say that takes seven years to write off, that takes 15 years to write off.
my tax rate's 40%. my tax rate's 38%. they know their tax rates. and overseas, which where i come from means lake superior, you know, we compete directly with canadians. in wisconsin. that's the way the world goes. they tax all their businesses at 15%. 80% of our businesses in america are not corporations. they're what we call pass-throughs. it's where all the jobs come from for the most part. their tax rate is north of 40% in many cases. and the average tax rate on businesses in the industrialized world are major competitors is 22.5%. so businesses know this. businesses know that in tough competition, where our economy's been pretty flat and stale, 1% to 2% growth, it's really hard. they can't give raises, they can't hire. but more importantly, they're getting crushed in international competition, if they're in any kind of international and competitive industry, which is almost most
industries these days. so businesses big and small know this very, very much. i hear two things. the regulatory state's been killing me and taxes are just putting me out of business. we know, they all run their numbers, we know we get this tax system fixed, we we get these tax rates down, we're going to be in really good shape. mr. fuelner: there's, as i look around at the conservative movement and the leaders of the conservative movement, i can't think of anybody around who isn't enthusiastic about what you're talking about. but then i look at some of your own colleagues in the house. for example, what are you going to do about deductibility of state and local? mr. ryan: this is why this hasn't been done since 1986. i think -- you know, as a product of having been a heritage person and having been empower america, being a conservative movement think tanker myself when i was in my 20's, i really do see that the conservatism and the conservative movement is as unified about this as anything i've ever seen.
so i feel very good where we are. with respect to everybody rowing in the same boat in the same direction. that's not always the case. mr. fuelner: for sure. mr. ryan: but that's the thing we have to get over. it's really the general interest is going to have to trump over the special interests. so things like state and local deduction, which i would argue were propping up profligate big government states and having states that actually got their act together pay for states that didn't, i think wisconsin versus illinois is what rushes to my mind. these are the issues that we have to help members see the big picture. and by the way, people, by doubling the standard deduction, lowering people's tax rates and increasing the child tax credit, people are going to be better off no matter what state you come from. that's the point we have to make and appeal to the general interest, which is, you want to grow jobs, you want american businesses to stop leaving this country? where i come from the biggest company we used to have headquartered in wisconsin was johnson controls. i bet you the thermostat on the
wall is problem a johnson control thermostat. they are an irish company now. nd their worldwide tax rate is 12.5%. business rups and moving because of tax policy. they're being bought by foreign companies and the headquarters are leave and we're losing our capital. so i think for lots of reasons members are beginning to appreciate -- there may be some narrow thing that they don't particularly like in this, but the broader picture's so -- broader picture so clearly prevails over the narrow view and this is good for their constituent, good for the country. that's why i feel very good about where we are in the house. and the senate. mr. fuelner: yeah, well. little more challenging maybe, right? [laughter] where we are right now, middle of october, you've got i don't know how many legislative days, not enough, and you're not always in when the senate's in.
and -- mr. ryan: that's this week. tull full -- mr. fuelner: how many times do you pass something and it goes over and sits on the senate cal der? more -- calendar? more than 100 items. mr. ryan: it's 273 but who's counting? maybe 274. we're going to keep it here until christmas if we have to. we're going to get this done. it's just that important. we are actually on track timeline-wise. the house passed its budget resolution, the senate got it out of their committee. next we'll they'll move their budget resolution. then conference committee. get that done. pass that conference report. and then the ways and means committee will put their bill out. because they have to get a revenue line from the budget report. then they'll put their bull out and then we'll go to markup and go to the floor. we'll get it over to the senate in november. and then the senate will process it. and that gives us time to get this thing done in law. so our point is get it done this year, we want to wake up on new year's day with a new
tax system. because we get a new tax system in the golf swing of 2018, that means all of 2018 is a good year where we can get north of 3% growth. i fundamentally believe we can hit a 3% economy in 2018. the difference between a 2% economy and 3% economy is trillions. it's higher wages, bigger paychecks, more take home pay and growth and opportunity abound. it really is that big of a difference. and that's why we have to get it done now. so that we can have a very good 2018. mr. fuelner: you go back to the reagan years and you look, it wasn't just 3% either. when you get 3%, it's easier to get to 4%. it's so much better for everybody as you look ahead and move ahead. as you know, i had the opportunity to talk with the president not long ago. and i urged him to get his cabinet out there talking about this same thing. are you doing this with all your members? mr. ryan: oh, yeah. mr. fuelner: they're on the same message? mr. ryan: absolutely. right, dave? no, they really are. we're crisscrossing the
country. we're doing events. i do quite a few events around the country constantly. i was up in pennsylvania with pat meehan at a forging business. i was over with andy hairs on the other side of the shore. at a manufacturing firm. so we're doing events all over the country. mr. fuelner: great. you talked about the other body. obviously you've got great members like your own ron johnson. are we making inroads with dems? or are we keeping our gals and guys in line? mr. ryan: i think the answer is yes to both of those. the reason we wanted to do it this way, meaning release a framework, is a lesson we learned from health care. the house passed its obamacare repeal and replace bill back in may. and then the goal then was, we'll get this done may and you in the senate get yours done in june andle we'll wrap this up by the fourth of july. that was the plan. the senate took months.
try to get this thing called the skinny budget. that didn't work. then they tried to get graham-cassidy. that didn't work. what we decided to do was, let's put more time and energy at the front end of the process to get everybody on the same page, so agree on this framework. which was -- this framework was written by the senate finance committee and the house ways and means committee with the trump white house. with treasury and n.e.c. so that we have a framework that we agree to ahead of time, put that out and now those tax writers are filling the details inside this framework. so by doing four months of spade work ahead of time, by getting us on the same page, that makes the actual process of staying together and hitting our timelines that much easier. that's point one. point, two i think as republicans we're wired much more similarly, our d.n.a. is, on tax reform. especially this kind of tax reform. broaden base, lower rates. we don't have border adjustment which became a controversial thing. so we wanted to get to consensus and that's what this reflects. with respect to democrats, i
can't imagine a democrat from a state like mine, a manufacturing, agriculture state, like indiana or north dakota or missouri, would just decide to vote with the ideological left against their own constituents. against their constituents who are farmers and ranchers and small business people, who are struggling just as much as virginians and wisconsinites under an oppressive tax system. i can't imagine a democrat will -- i understand they're going to vote ideology on the party line on judges and things like. this but on something so rudimentary, so clearly in the interest of their constituents and the economy, of the people that they serve, i can't imagine we're not going to get votes from some of these democrats. i really believe. because if you listen to what they say, they're saying the same thing we're saying. i just quoted barack obama on the need to lower corporate tax rates. so i really do believe that there's going to be a bipartisan support for this. and given that we're wired the same way on tax reform, i feel like we're on the same page.
the last point i'll say, is unlike health care, where we could only put about half of what we wanted to in a reconciliation bill on health care, a lot of that's regulatory stuff you can't put in reconciliation, the whole bill goes into this. this is a won and done effort. the sfwire tax reform package, the entire tax cut bill is in one bill that is through reconciliation, which cannot be filibustered. and that complete product makes it easier to pass. mr. fuelner: and that's what the president signs and that's it. mr. ryan: that's right. mr. fuelner: this might be a little off point, but i don't know if you've traveled much overseas. i have. and a couple of times in europe within the last couple of months i'm always asked, are you guys really serious about tax reform? and they say it almost a little bit concerned. because, boy, if the united states really is coming back worldwide, they're worrieded. they're worried for their own businesses. mr. ryan: i just mentioned johnson controls. their headquarters is in
ireland. you go to these other tax jurisdictions, they've been pulling our companies left and right. netherlands, germany, ireland, england. switzerland, a ton of companies are going there. we're miller people where i come from, but budweiser is a pretty popular brand. their headquarters are in belgium. so that's happening all across the world. where foreign companies are buying u.s. companies because of tax reasons. or u.s. companies are just inverting. and so i think a lot of foreign businesses, foreign companies, countries, excuse merks they see a huge advantage over us because we're doing it to ourselves. when we lower our tax rates below the national -- the international average, we are going to lead again. we basically had the worst code in the industrialized world. the worst code. and we're going to be in the front of the pack. and that will be -- that's what we did in 1986 and look what happened as a result. it was a phenomenal growth in jobs and investment and opportunity and just the anxiety we have in america
today, there's a lot of reasons for it. but i would argue economic stagnation is one of the greatest reasons for it. income levels, wage stagnation, flat living standards, that is the stuff of anxiety. that is the stuff of the polarization we see in america. we get growth and opportunity restored and confidence resnord this country, which is what tax reform gets you, it's going to help a lot of our problems. it's not going to solve every problem in america, but it's going to make a bunch of them a lot better. mr. fuelner: it sure. is paul, i just want to say as we wrap this up that our joint mentor, jack kemp, would be very, very proud of you. thanks for everything you're doing. mr. ryan: appreciate. it thank you. thanks for coming back. mr. fuelner: thanks for coming over. mr. ryan: really. [inaudible] thank you. [applause] [captions copyright national cable satellite corp. 2017] take you live now to toronto on major world